Safety is an Expensive Illusion

Man, I sure lead a risky life these days. I’ve learned that I am on the bleeding edge of so many wild frontiers, it is a wonder that I’m still alive. When you add in the fact that I’m also in great health, constantly happy, and I even still have all of my fingers and toes, I am expecting a call from the Guiness Book of World Records any day now.

Let’s review a few of the risks people have told me I’m running:

When I write about my strategy of driving only small, fuel-efficient cars, people chime in about how dangerous it is to drive anything except large trucks like the Chevrolet Tahoe.

When I write about how we should all ride bikes, people whine about the danger of getting hit by cars while cycling.

When I describe my love of carpentry and the power tools which make it possible, I get tales of severed fingers and punctured eyeballs.

When I suggest that it’s more cost-effective to use only high-deductible health and home insurance, people talk about the risk of chronic diseases lurking just around the corner and the litigious people with slippery shoes who might fall on my sidewalk.

When I write about how I never keep more than a few thousand dollars in uninvested cash around (instead of the $30,000 “emergency fund” that beginner financial advisers suggest), people gasp and talk about the dangers of holding only volatile investments.

I’ve been riding dirt bikes and motorcycles for 22 years now.. long enough to receive dozens of lessons about how dangerous those Death Machines are.

I’ve even received earnest lectures about the dangers of microwave ovens, cell phones, wi-fi routers, fiat currency, nonstick pans, and the radioactive fallout from Japanese nuclear reactors. All of which I have taken no precaution against.

So I’ve come to realize that I really am living on the edge by modern standards.

How could this be? Why does our society have this obsession with safety and danger anyway? Have they picked it up from watching TV during the 15 years since I tuned out of the medium?

Modern media seems to have figured out that Fear Sells*. If it’s possible to portray something as Scary, those sumbitches will find a way to do it. They’ve noticed that fear will keep you glued to the set, and fear will force you to make purchases to protect yourself.

I see all of this as breaking down to two possibilities: Either I really am a radical risk-taker and these detractors of mine are much more sensible than I am. Or maybe, just maybe Mr. Money Mustache has actually thought about all this shit and still come to the conclusion that life is safe enough.

As it turns out, I like doing the math on things like this. I can’t keep myself from making estimates of the Expected Value of almost every life action you can put a number on. These calculations happen whether I want them to or not, so I might as well make the best of it.

Let’s use the often-repeated Small Car Argument as an example.

I love small cars – the smaller the better. Better handling, easier parking, less wasted materials, and much better fuel efficiency. But some people think small cars are unsafe. They like to repeat scary statements like, “In a crash, the big vehicle wins. End of story”.

But let’s look into that a bit further. The US government agency called the NHTSA compiles statistics of every major crash that happens in this country, and they’ve been doing it for decades. This has helped car manufacturers improve their designs to the point that fatalities (per mile driven) have dropped by 85% since the 1950s. What’s the rate today? About one fatality per hundred million vehicle miles driven.

Next we can compare the fatality rates by vehicle type:The measurement is a little different, since this chart compares fatalities per 100,000 vehicles instead of per mile. But we can still reasonably estimate that my subcompact car is about 16.85/12.34 = 37% more dangerous than a full-size SUV. (also note that midsize cars are safer than SUVs of any type, further proving that the S is for Sucka).

In an average year, I might drive 7,000 miles. So I’ve got a 7000/100,000,000 chance of killing myself by driving in any given year. In other words, there’s a 99.993% chance of surviving.

I’ve got at best 60 driving years left in my life, so over a lifetime my chance of survival is (99.993^60), or 99.58%. In other words, driving causes an expected 0.42% reduction in my lifespan. 0.42% of 60 years is about 4 months.

If I increase my chance of dying by 37%, I subtract another 1.5 months from my expected lifetime.

Is driving a Chevrolet Tahoe instead of my 2005 Scion xA for 60 years worth that extra 1.5 months of life I’m expected to gain from it? Let’s put that another way.

Driving 7,000 miles a year for 60 years adds up to 420,000 miles. According to the EPA website, the 2005 Tahoe gets 14MPG combined, using 30,000 gallons of gas costing $120,000 at today’s prices.

The Scion, burning at the EPA estimate of 30MPG combined (even though I average about 42 in mine), will use up $56,000 of gas. The fuel savings is $64,000. The savings over a lifetime of buying and maintaining smaller vehicles is even larger, but for this argument, fuel savings alone is enough to make the point.

How long do you have to work to save $64,000 after taxes, commuting, and other work-related expenses? I’m guessing it is at least 6 months, and more likely two years or more.

So the ‘safe’ SUV driver is working an extra two years, in order to extend his life by 1.5 months. That is not my idea of a good life strategy.

And that’s before even taking into account the happiness gained by driving a sweet little well-engineered Japanese car instead of a gigantic piece of shit that can barely navigate a parking lot!

Ok, that example ran a little long, but it sets us up nicely to handle the rest of the list in a flash.

As it turns out, riding a bike extends your lifespan (due to health increases) by between 20 and 100 times more than it subtracts due to statistical risk of crashes. Ride a bike, and you can expect to live a lot longer, it’s as simple as that. Add in the cost savings from cycling, and the decision becomes even more obvious.

Investing your money in productive assets like stocks provides much greater returns than keeping it “safe” in guaranteed accounts which don’t even keep up with inflation.

Over-insuring yourself for any risk (including medical bills) provides a guaranteed stop on possible annual losses, in exchange for a statistically guaranteed larger lifetime loss in wealth. I can do the math almost as well as the actuaries at the insurance company can, and because of that, I carry insurance only against the most catastrophic cases (which don’t include minor things like totaling a car or under $10,000 of damage to my house).

Carpentry and power tools provide guaranteed returns in exchange for an acceptably small amount of risk, so I take the risk and continue to profit.

The microwave and the cell phone present no statistically significant risk to human health. Even if there was a risk, it would very likely be lower than the utility that these devices provide to my life, so I’d still use them.

Do you see the pattern now?

The risk-fearing Complainypants types always focus on the negative consequences of any possible activity.

What they’re missing is the risk of not engaging in that activity. That risk is just as real, and it’s usually larger. But it’s a more hidden and less scary risk, so they take it, and over time they lose.

Statistically, there only two risks in modern life that are significant enough to get me a little scared:

the risk of wasting my life by not living it to its fullest

the risk of ruining my own health at an early age, possibly limiting my ability to accomplish #1

For most US residents, both of these carry a probability that is astronomically higher than everything else described in this article combined. Upwards of 50%. It’s so huge, that almost no other risks matter by comparison. So we can happily ignore everything else and focus on just those two things.

My goal for the Mustachians is to constantly whittle both of those numbers down toward zero. Interestingly enough, the best way to accomplish it is often to fuck the conventional notions of “Safety” and start putting some good old-fashioned Risk back into your life.

Update: One year later, I dug into the bicycling statistics a bit more and wrote another article on scaredypants disease. Biking turned out to be a little bit more dangerous than I had estimated, but it still easily wins as the safest form of transportation, because it extends your life by much more than it subtracts. Many complaints poured in over the minute details, but none were able to overcome the logic that is similar to this article: NOT cycling (or walking extensively every day) is a guaranteed loss. Sitting on your ass at a desk is extremely hazardous to your health. Cycling is a huge gain, with a small and easily mitigated accident loss that you subtract from that gain.

*Fear Sells: That is surely why the Bullshit TV News focuses on scary and irrational short-term issues. But you know what? I’m finding that Optimism Sells as well, and it sells to a much nicer audience. To some, this is just a natural way of viewing the world, but it seems we’re an under-served audience. Optimism is also why I sought out that guest article from Jim Collins– he’s one of the few other people out there correctly reminding us that Everything is gonna be All Right.

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I recently had a conversation with a friend on this topic. Nice timing.

“I’m putting all my savings in a 0.65% APY account! Sweet!”
“Why not in a balanced portfolio of stocks/bonds?”
“Way too risky! What if I need a new heater or something?”
“If you really had to- just sell some shares…”
“But what if the market is down when I need the money? That sucks!”
“So you’re willing to give up all the gains on all the other dollars over all the other years just to avoid the chance of extracting a couple grand in a down market?”
“Well…I hadn’t really thought of it that way. [does some quick comparison math] Yeah it looks like I come out way ahead that way. You know where I should go for more money info? Sounds like you’ve thought this through…”
“Yeah, check out this mustache guy online…”

I too maintain an Emergency Reserve Fund in a savings account. It will cover one year of my basic living expenses. But since that only amounts to $15,000, the cash tied up in my Emergency Reserve Fund is just 3% of my investment portfolio. So, even if the peace of mind I get from that Emergency Reserve Fund is all in my head, it’s no biggie IMHO.

What is really an expensive illusion of safety is the way a lot of people cling to jobs they really dislike for fear of trying something new and different that would be more fulfilling and rewarding. That path leads to a sad waste of life — without any real guarantee that they won’t lose that job anyway.

People even let a fear of taking risks diminish their discovery and enjoyment of new activities and passions. And I think that’s the worst because that’s the area of life where there’s the most to gain and the least to lose. I can’t imagine myself NOT having pursued scuba diving for fear of getting the bends. Or NOT having started my personal finance blog for fear of failure. I would be missing so much. (But I am not!)

“What is really an expensive illusion of safety is the way a lot of people cling to jobs they really dislike for fear of trying something new and different that would be more fulfilling and rewarding. That path leads to a sad waste of life — without any real guarantee that they won’t lose that job anyway.”

The problem is that people don’t *know* that something else would be more fulfilling and rewarding. Or they think it would be, but since they’re starting over it’s a pay cut that they might not be able to afford. If I found a job that I knew was more rewarding, I’d take it tomorrow, even at the same pay. Because at least it would increase the satisfaction of going to work every day even though it wasn’t a financial improvement.

True. Count me in that number. I work a job I absolutely hate. I can actually afford to cover my expenses without working thanks to passive income from rentals, but I’m irrationally afraid to change my life. I’m working on it…

Interesting you mention SCUBA. I’m an instructor because THAT is what I actually want to do for a living, but I’m too afraid to take the dive and do it full time (pun intended…)

I am an early retiree, with almost all my stash in cash. Why? Because I have Enough. 20 years of running a ‘life’ spreadsheet tells me I will not run out, so why put my savings at hazard? I really sleep soundly…

Minimal expenditure of brainpower, actually. Evolution has primed humans to be cognitive misers to avoid thinking too much. It consumes a lot of energy having a big brain, and the energy budget of a pre-modern human wasn’t very large.

When I worked at a local university, I was participating in their 401K program, which included a 10% match of your max of 5% contribution. Unfortunately, I ended getting deeply in debt, so I stopped contributing because I couldn’t afford it anymore. I don’t remember exactly *when* I had to do that, but it was probably the last 7 years of my 18-year time there. Fortunately one of the older maintenance men there convinced me of the importance of participating shortly after I got hired, or I wouldn’t have had the money that IS in my 401K account…

Very interesting article about risk and fear. Yes we live in a very safe but fear based culture. One example is the current hype around the number of female college sexual assaults being one in 5. Those numbers taken from a bogus study when actually the risk is closer to 2% and 20% lower than non college female population. It’s actually safer for females at college!

As for the safety of biking, if more people commuted on bikes the accident rate would be much higher because most riding occurs on weekends or in large groups when it is safer.

You are probably right that cycle commuting slightly riskier than recreational cycling; however, MMM’s argument that the health benefits exceed the risks by a fair margin (ignoring the significant economic benefits) still holds true. Furthermore, as cycling becomes more common in an area, it becomes safer because the motorists begin to expect to see bikes and therefore look for them. In many collisions between cyclists and motorists, the cyclist was not following the rules of the road; so, you can control a significant portion of the risks of cycling by learning and following the rules of the road (basically cyclists should operate like a slow moving vehicle – ride in the direction of traffic on the street in the right hand lane observing traffic control devices like stop signs and traffic lights).

The reward of cycling only holds true to the extent that it does IF one applies the health condition of the population aggregate. If, however, you are already someone who is into recreational biking, running, or other physical activities then the relative benefit disappears or at least becomes vanishingly small. Put another way, the assumption is that the person either commutes on the bike or is entirely sedentary or sedentary to the extent that the population as a whole tends to be. When you do risk analyses for yourself as an individual you have to apply the statistics that apply to your specific application and not of the applications of the population as a whole. I bike about 100 miles a week but I do it on a dedicated greenway with no motorvehicle traffic. My risks are not the same as someone who commutes on roadways in an urban area for 100 miles a week. I cannot use the per mile average for the entire population in my risk calculation – I have to look at my specific situation.
As for the author’s risk analyses with respect to motor vehicles (and cycles for that matter) the calculation should be based on (or should at least include) GIVEN that an accident occurs, what is the likely outcome, and that analysis should not only include relevant data but also incorporate a sane physics base analysis. In the manner that he applies his own version of statistics and probability there would be no need to wear a seat belt, which of course there isn’t, but it’s an easy risk mitigation device.
In many of his risk analyses here the author has started with a conclusion then found the pieces that work to support it while ignoring the rest. One cannot say that Russian Roulette is a safe game simply because of 10 successful consecutive outcomes, for example. Whether it’s adequately safe given the player’s enjoyment and own risk acceptance is another matter. I find most of this article to be pretty lazy from a risk and reliability analyses standpoint even though I fundamentally agree with a number of the conclusions (especially high deductible health care).

Funny you should mention the seatbelt thing. I come from a motorsports background, so I know of a secondary effect of seat belts: THEY KEEP YOU IN PLACE. Pull the belt portion tight by pulling up on the sash portion just before a set of twisties (bonus points if you can then lock it in place) and you notice an immediate imporovement in handling and confidence.

I’m amazed more people don’t know about that. Or am I the only person that ‘wears’ a vehicle rather than just poking at its controls?

I was (and still am to an extent) one of those scaredy pants people who was afraid of getting hit by cars while I was on a bike. For some illogical reason, I only felt this risk was greatest when commuting to and from work on a bike, so I never biked to work. Yet I had no problem biking on weekends, in traffic, on streets similar to those on a potential commute to work. Last May had a Bike to Work Day and with your inspiration I decided to take the plunge and do it. I had a fantastic time. I felt great. I saved money. I improved my health. Yes, I got all these crazy looks and comments from coworkers about the “dangers” of what I just went through, but it hasn’t stopped me from committing to bike to work at least one day a week. I’m working up the courage to do it more than once a week.

So, to those out there afraid of doing it, just go out there and do it. Don’t think about it, just do it. You will feel a great sense of accomplishment and question why you haven’t been doing it all along.

“As it turns out, riding a bike extends your lifespan (due to health increases) by between 20 and 100 times more than it subtracts due to statistical risk of crashes. Ride a bike, and you can expect to live a lot longer, it’s as simple as that. Add in the cost savings from cycling, and the decision becomes even more obvious.”

On that note, it’s really worth it to check out the Google Maps bike route beta. I had NO IDEA there were so many quality ways to meander through my moderately busy suburban city while still avoiding the busier streets.

For the sake of checking it out, I looked at what route it would draw up for my commute to work (about 17 miles away- i had always written it off for that reason), and i was shocked that it only had about five miles of actual main surface road biking total!

the nifty thing is that it shows you when it’s a “bike-friendly” road (I’m guessing that means it’s not as busy or has fewer known accidents), when it’s a road with a designated bike lane and when it’s a trail path. You’d be surprised just how bike-friendly your neighborhood is if you take a look!

I find that the google maps marks bike friendly roads somewhat inaccurately. Mostly what it does is mark the places where the a bike lane exists. Some road with a bike lane are more dangerous than roads without.

However, it’s a cool tool and I’m looking forward to how it improves over the years. It would be nice if we could coach it to avoid left turns, which are the bane of my existence.

I’ll quibble with one aspect of your analysis, even though this whole exercise ends up resulting in at best a rounding error in life EV, as you so gracefully conclude.

When you comment about how the midsize cars are safer than the giant rolling yachts, the problem is that none of us can tell from the chart how much driver-safety is correlated into the data.

Put another way, there may be so many more patient, cautious, innately-safe drivers electing mid-size cars that it skews the results. Without data that properly controls for driver comportment, it is likely incorrect to surmise that any *specific* driver will be safer in a specific type at the ratios expressed in the table.

I don’t think he was saying that driving a midsize car was safer… it seemed to me that he was saying that it wasn’t more dangerous enough to make it worth worrying about. The results show that driving a smaller car results in a slightly higher fatality rate, in fact. His point is that he gets better utility out of not having to work and pay for the extra gas and car than the statistical amount of lifespan that he loses.

I WAS actually suggesting that midsize cars are safer according to the stats, but I’ll also concede that there is self-selection bias in that different types of people buy different vehicle types. We just can’t tell how significant this effect is, since the NHTSA is not correcting for it in the stats.

This bias surely shows up even more in motorcycles (since young dudes are the primary buyers of sport bikes, and a good percentage of them use the roadways as racetracks). And bicycles (in the US, since adults have forgotten about bikes, most of the riders are children. But kids are pretty dangerous cyclists compared to driver-education-trained adults, so it skews the statistics to make cycling look more dangerous).

Bit of a latecomer to this thread– I commuted to work via bike for years (until I semi-retired this May), and I actually HAVE been hit by a car!

I broke my tailbone and had some gnarly scrapes, but oddly enough it actually earned me money– a nice Insurance settlement (I was hit from behind and it was in no way my fault) for medical bills, lost wages (which weren’t many since I could work from home after a few days of ouch-ing it up on the couch) and pain and suffering. Started biking again after I healed (albeit via a different route).

In college when walking to an event from my car on the sidewalk a touring golf cart (it had at least an extra row of seats) hit me from behind and it spun me around so I ended up with my tailbone hitting the sidewalk facing the opposite of where I was going. Turns out it fractures my tailbone pretty hard! The school paid Medical bills but that was it. I shouldn’t have been lazy and just sued them properly. I couldn’t sit through a movie in a theatre without pain for almost a decade let alone do most floor exercises or sit on the floor. And the immediate pain to about a few weeks later was horrid.

Actually, the major confounder may be number of passengers. Compact cars generally have one passenger, while SUVs on a miles traveled basis (e.g. taking into account vacations, etc.) will have much more. Since this is raw # of fatalities per X number of vehicles, it will make SUVs look WORSE and compact cars look better.

From looking at the section of road with the HOV lane here I would say that 99% of vehicles, no matter type, have 1 person in them. The HOV lane moves pretty quick and I notice a mix of vehicles from motorcycles, to compact cars and a couple SUV’s.

Anecdotaly my family growing up had 7 members, and we road in either a minivan, or a Ford Taurus station wagon. In later years it was an Eagle Vision, and a Ford Festiva. Also at my work I notice that the carpool only parking spaces have a lack of SUV’s. Perhaps it is the ones who are more gas conscious don’t opt to buy low MPG SUV’s to begin with.

The argument that SUV numbers look worse due to passenger count is illogical when you notice that mini-vans and large vans come in as the safest vehicles. While one could argue than many large vans are used as single passenger cargo vehicles, I find it hard to imagine that the rate of muti-passenger trips in SUVs exceeds that of mini-vans.

I would honestly be more concerned about how location can skew the results rather than each particular drivers habits. This is because, it’s not just your habits that can cause harm, it’s the habits of everyone that you pass on the road that day as well. So, even if you are a great driver, there is not a guarantee that someone else won’t smash into you.

However, it seems to me that some places just have a much more relaxed driving culture than others. I personally have been in 2 wrecks in Florida in my life, one of which involved a semi totaling my family’s car. This is despite the fact that I live in Indiana and have visited Florida only 10 or so times. Total wrecks in Indiana: 0

Oh, and in the semi wreck we were in a Prius and going about 65 mph when the semi ran us off the road and bounced us around. We even hit another car head on while we were spinning. Despite this, not a single person in the accident sustained any major injury. Clearly, small cars can still take quite a beating and keep you safe.

Ah, but isn’t it also likely that the purchase of a mid-size car, being what it is and what it represents in a social sense, would lead a person to become a better driver?
i.e. I’m not some damn fool who thinks his commuter-tank is the Ultimate Vehicle of Awesome Impenetrability and Swerviness.

Indeed – risk compensation was the theory held by the authors of a UK study that found the accident risk of motorcycles to be LOWER than that of cars, when looking at a single demographic (police officers) to control for differences in driver behavior.
In other words, if in place of airbags, cars were required to have a giant steel spike visibly sticking out aimed right at the center of the drivers chest, the accident rate would likely drop to zero. Because in reality, there are no “accidents”. There is only negligence.

Decent point, but I think the biggest effect is probably in making the smallest cars seem more dangerous than they really are: the smallest cars are frequently sports cars, which, although they frequently have more safety engineered into them (better braking, handling, restraint systems, etc) are more likely to be driven recklessly based on the sort of person who buys a sports car.
Aside from that though, notice mid-size cars rate as safer than ALL other categories except vans. Is there any compelling reason to think all other drivers of all other vehicle types are all reckless? Even if that accounted for some of it, I think this pretty clearly shows that “heavier = safer” is a myth.

Great post!
Fear is a great way to encourage people to buy things that they don’t need. You should only insure against things you can’t afford to replace, like buildings. We don’t have life insurance as if one partner dies, there is enough wealth to support the other and the money we would spend on a policy is better invested elsewhere.
Health care here in the UK is a bit different – for major health issues the state free health care system is generally very good, but for less urgent issues the private providers can be quicker.
The American obsession with big cars fascinates me. Common sense says that if a big car hits a small one, the small one will be worse off but if both hit something stationary, like a wall, the big car has a lot more energy to absorb. Also, big cars – especially trucks – with a separate chassis are not good in accidents as they are not designed to deform as small cars are and impart huge forces to the occupants.
We drive a diesel Golf with 140HP and average over 40MPG (US) over short and long trips including cruising at 85 mph. We also pay over US$8 per (US) gallon!
Risk is fun. You need fun in your life.

“if a big car hits a small one, the small one will be worse off”
thats only true for head-on collisions. In rear and side-impact collisions it makes no difference.

And maybe you find it acceptable risk, but the effect of speed on accident likelyhood and severity is exponentially greater than the effect of mass:
Force = Mass x (Velocity squared)
85mph in a large car is far more dangerous than 55mph in a sub-compact.

Wait, Force = Mass x Acceleration. Acceleration is not the square of the velocity, but the derivative.

I don’t think force is the physical concept that makes the accident hurt. If it were, a car moving at constant speed would be completely benign, and that just isn’t true.

I’m not sure which concept from physics would be appropriate here. Energy? Momentum? Impulse? I haven’t studied enough physics to be sure which it is. I remember that in collisions momentum is (supposedly) conserved.

If you meant Energy, then your point was correct, since Energy = .5 x Mass x (Velocity squared).

Ahh, you got me! But how many people would have understood the basic principal of the equation had I wrote F(a)=m*(Δv/Δt)
Given that v=d/t and a =d/t^2, for constant a I figure v^2 is a close enough approximation to get the point across: a crash from twice the speed will have about 4 times the impact force.

A car moving at constant speed IS completely benign. Thats why millions of people are able to drive around at constant speeds everyday and not get hurt. Its only when that speed changes, and changes rapidly, that there is a problem. Jets move around at constant speeds over 500MPH, which is totally benign since there is nothing to run into up there.

The amount of kinetic energy the car has is directly related to the amount of force required to stop over a given distance F=(1/2*m*v^2)/D
in a crash D would be very small – the point of crumple zones and airbags is to try to increase it, but clearly v has a greater impact on that equation than D or M can make up for.

I believe technically the most relevant variable is jerk, the deriviative of acceleration (i.e. the rate of change in acceleration)

Thanks for the clarifications, especially regarding the connection between kinetic energy and distance.

Now, about the constant speeds. If I got hit by a jet moving at a constant speed of 500 mph, I’m pretty sure I would be hurt by it. Would that be because a change of speed is inevitable when the collision occurs?

Your body would go from 0mph to 500mph in a fraction of a second, giving you a massive acceleration (and jerk).
Although I can’t figure out what you are doing floating around in mid-air!
I guess if you were standing on the runway – and it came in for a landing but didn’t slow down, (they don’t go that fast near the ground!), same situation.
If it just fell out of the sky, you have the additional issue of being physically crushed by its weight, but there is still the initial issue of you being accelerated, however briefly, from the impact force.

Incidentally, note that for the forces that matter: the ones on your body – its the mass of your self (not the car) and the time and distance your body takes to change speed that matter. Hence a car with crumple zones means you travel further relative to the bumper, which in turns means you decelerate over a greater period of time.

However, in terms of braking distance (i.e. avoiding a wreck in the first place) those same formulas apply to the mass of the car.

I’m a mechanical engineer, and I approve this message. Good explanations Bakari. :-)

Capt_YellowAugust 23, 2012, 10:24 am

You can. Drag the “route” to where you want it to go and it will route that way. So if you want to avoid a left turn, drag the route to a different street and it will avoid that intersection for you. I didn’t explain that well, but try it and you can learn to avoid left turns.

Capt_YellowAugust 23, 2012, 10:39 am

Although, technically inaccurate. The important point that he’s making is: if your car weighs twice as much, it’s about twice as bad, if you’re going twice as fast, it’s four times as bad.
“Technically:” velocity would be the derivative of acceleration and not the other way around; the car is always accelerating because, even with constant relative speed, the direction would always be changing at least slightly; the airbags and crumple zones aren’t effective because of changing distance but because they consume energy- the energy is used to deform/deflate them rather than deform you; and the force equations come into play as vectors in the crash- in the simplest case, the little car comes to a complete stop and goes backwards and the bigger car doesn’t, however the cars aren’t infinitely narrow and so they will spin making weight differences less favorable for the bigger car; little cars are inherently safer due to lower kinetic energy; comparing little and bigger cars due to the cited data is irrelevant because an individual doesn’t drive all cars but drives only one at a time- that is, a small Mercedes can be safer than a large Tahoe regardless of mass as that is only one, small factor as demonstrated by impacting an old “death trap” vehicle with a new, smaller vehicle.
In conclusion, mass is only one variable and one that can be compensated for by other variables and thus is irrelevant. And I will add that, in my opinion, it would be prudent of a person to drive the safest car that he can afford.

DillonAugust 23, 2012, 12:24 pm

“Technically:” velocity would be the derivative of acceleration and not the other way around”

Sorry capt_yellow, that is false. The 1st derivative of position is velocity. The 1st derivative of velocity is acceleration. The derivative of acceleration is jerk and so on. Yes, airbags and other safety devices do consume/absorb energy, but this is due to the energy being spread (or as Bakari said, the delta of velocity divided by a longer time interval) out over a slightly longer period time (and at the end of the time interval, e.g. when a body hits the airbag, some of that deceleration and change in velocity has already started to happen so the impact is lessened). Think of a trampoline. You don’t feel hardly any impact at all when accelerating toward the surface for a few seconds with gravity and then landing on the trampoline because the impact is so spread out over time, the intensity of the energy/force is low enough to where it doesn’t break your legs (and then of course the spring constant is such that you go back up for endless enjoyment).

GerardJune 8, 2012, 5:03 am

Based on completely unscientific personal observation, cycling doesn’t just increase your lifespan, it makes you healthier and fitter at all stages of that lifespan. The 70-year-old cyclists (and dancers) I’ve met are physically and mentally ten years younger than their sedentary counterparts.
In other words, cycling and similar activities don’t just extend your life, they extend the *good* part of it. You’re not gaining ten years at the end, you’re gaining ten years now.

This is the place where I wish there was a “like” button in the comments because this is basically just going to amount to liking what you said. But I’m so glad you said it. That, more than anything, is what motivates me to be active (not that I always succeed). The other arguments tend to get me thinking I “should” be more active. But this point actually makes me WANT to be more active. I will try to repeat it more to myself and to others!

What he’s saying is that for every 100,000,000 miles driven, one person dies.
Since he drives about 7000 miles every year, his odds of being that one person who dies are: 7000/100,000,000
This works out to only a 0.007% chance of being the guy who gets killed.
Or, better said, a 99.993% chance of living, just like everyone else.
It should also be added that the safety benefit of the larger vehicle is vastly outweighed by much more effective measures … like moving closer to work. If you really don’t want to die in traffic: drive less.

“It should also be added that the safety benefit of the larger vehicle is vastly outweighed by much more effective measures … like moving closer to work. If you really don’t want to die in traffic: drive less.”

Super excellent point, however, as shown by MMMs stats, there IS NO safety benefit from a larger vehicle!
A mid-size car is smaller and lighter than a full-size car, all trucks, and all SUVs, and yet is safer. The “heavy = safe” thing is just “common knowledge” which was based on an incomplete understanding of physics and never had any basis in reality in the first place.

” The “heavy = safe” thing is just “common knowledge” which was based on an incomplete understanding of physics and never had any basis in reality in the first place.”

Well… not entirely. Not that I disagree with this article, or your comments below, but there is some truth to “heavy = safe” for certain collisions. Since the damage is caused by sudden change in velocity (acceleration) as you stated in your physics analysis above, but a large car carries more momentum and therefore potentially has less change in velocity . For example, if my Prius flies into a barrier and the barrier barely gets pushed back an inch, then the front of the car has an instantaneous deceleration to 0mph, and my body has a slightly less sudden deceleration defined only by how well the car collapses.

On the other hand, if I take an Escalade into that same barrier and it gets pushed back 20 feet by the momentum before it finally comes to a stop, that’s an extra 20 feet of travel before coming to 0mph, meaning the impact is less.

The same is true for car on car collisions, although there are more variables to consider.

Either way, it’s all a moot point since the death rate is so low, and there are too many other variables (drunk driving, texting and driving, bias of car types and the drivers who would select them, etc). The point is, unless there was an order of magnitude different between different car types, safety should not be the primary factor for buying a large car.

You are making the same mistake that the IIHS makes = equating “crash test” with “safety”. How much energy the mass of the car absorbs in an impact would be directly related to safety ONLY if you assume that a head-on collision is inevitable. (Only head-on counts, because mass has no effect on rear-end or side impact collisions – and whether your car hits a fixed barricade is 100% up to you as the driver. If you are concerned about safety, don’t drive into barricades!)

However, those same formulas that say that speed is dangerous, also show that they heavier a car is, the worse its stopping distance.
In other words, all other things being equal, a car that weighs half as much may be able to stop in half the distance.
Which means that while the person in the tank of a car may survive a crash, the person in a lighter car AVOIDS that same crash in the first place!
So which is really safer?

I hate to rat-hole about this since I think we’re ultimately in agreement on the final analysis, but I enjoy the intellectual talk.

In other words, I’m just chatting and not trolling for a fight. :)

But why do you think rear collisions are not applicable? If I’m in a Hummer and you drive your smart car into my rear at 30 mph – and the result is that I barely budge while you come to a complete stop and your car collapses under my bumper – then size and mass both mattered.

Or turn the tables. If you’re sitting at a red light in your smart car and I fly into your read in my Escalade as I eat my cheeseburger and text my buddy – I plow through you barely slowing down while you just went from 0 to 30mph in an instant.

Seems that rear collisions apply too, no?

(this is all coming from a guy that only commutes via motorcycle and bicycle – so I’m not at all promoting the purchase of Hummer’s and Escalades)

I’ve read a study of accidents with semi-trucks – which outweigh SUVs by about 50 to 1. When a semi rear-ends a car, it is rarely fatal to the car occupants – because the car simply starts moving forward, and there is no significant jerk.
(Significant exception is when the car is forced into another vehicle in front of them – yet another reason to leave large following distances).
Not counting when the car is pushed forward into the next car, only 0.3% of crashes where a car is hit by a semi is fatal.
Clearly mass difference does not play a significant factor is safety in a crash in which you get hit from behind.

On the other hand, any passenger vehicle hitting a semi is usually fatal – hitting a semi is practically the same as hitting a fixed barrier.
However, as with hitting a fixed barrier, you can eliminate that risk entirely as a driver by your own choices. A semi can not stop on a dime, so if you hit one, you were obviously doing something very wrong.
The same principal applies to smaller vehicles. If you never tailgate (or drive drunk or sleepy), you will never rear-end anyone, and mass becomes a moot point.

SpectatorJuly 15, 2012, 2:41 pm

Almost necro-posting, since this is a month old, but a minor correction:

In a 2 vehicle collision, the ratio of mass matters regardless of what direction the collision occurs in. e.g.:

Punk driving a 3 ton Land Cruiser rear ends a stopped Corrolla at 70 mph. In the moments after the collision, the combined wreckage weighs about 4.5 tons and has the same momentum as both had previously, so it is traveling about 46mph. Occupants of the LC experience a 24mph crash, while those in the Corolla accelerate from 0-46mph. That’s nearly four times the kinetic energy. It may also be more energy than the Corolla’s structure can absorb, and it may turn into a fireball. Cop cars are tested for a 70mph rear ender, but most civvy cars cannot handle that.

Of course if the Corolla driver may be able to experience zero crash energy, if he can avoid being on the road when the bars close ;-)

But the overall point of the column is correct – the chance that you in particular will be the unlucky winner of the punk’s misdirected KE is tiny, while if one drives 2x the vehicle you need, then the chance of wasting working hours paying for it is 100%.

@ Brave New Life:
You are correct that both mass and velocity play a role in the transfer of energy.

Kinetic Energy = 0.5 • m • v^2

And based on the law of conservation of energy, that energy doesn’t just disappear — it is transferred to whatever object it comes in contact with. This explains why, for example, in bumper cars, it’s better to be the faster car hitting the slower moving vehicle than the other way around (increased velocity = increased energy). The smaller or slower moving vehicle will experience the greatest change.

7,000 miles driven per year multiplied by the chance of a fatality (1 in 100m).

Exactly how an actuary would work out ‘exposed to risk’. You need to consider both how risky an activity is as well as how much of that activity you do to calculate the overall risk.

Great article. So few people understand what risk really means.

I’m also with you on the insurance point Mr MM. Paying to insure events that you can reasonable afford to take the hit on if you prepare yourself is a guaranteed way to transfer wealth to the insurer’s shareholders.

I insure my house against it falling/burning down and my vehicle is insured against third party damage (I’ll pay for my own wreck if I crash). Anything else I can cover from my ‘stash.

1. 4,244,156.96 million passenger miles are driven fatality free!
2. There are 42,442 deaths.
3. Of those deaths, 21,221 are people not wearing seatbelts and 10,610 of those would have been non-fatal with a belt.
4. Unbelted car occupants are 9 (nine!) times more likely to be killed on a per mile basis.

I live in Africa where risks are somewhat different. I chanced upon your blog and I really felt at home given that my lifestyle seems to confuse my friends and family

Turning 50 next week I have been on a journey for at least 15 years to be an idler but happily married individual. This entails working only a couple of days a week, playing golf, running ultra marathons and travelling extensively with wife both locally and internationally. Have just returned from Chicago and Amsterdam. It did not just happen. It took some long-term planning

Whilst I am not fully retired I could be. Not having children leaves me with significant amount of free time some of which I use to undertake volunteer teaching in some of the poorer ares of our city.

Public transport is almost non-existent here, however I almost exclusively use a Vespa scooter in order not to have to use a car. I have a mountain bike I use for short trips to the supermarket etc.

In comparison to our friends, our lifestyle is supreme. No health issues of any kind, zero debt, investments and passive income all in place. They still remain befuddled as to how we do it. Simple – give up all the big toys,drop the restuarants, sit back at the coffee shop with the newspaper before golf every Thursdayand get your priorities sorted.

I have read a number of you previous postings icluding the guest posting by JH Collins. The F-you money is right up my alley as it allows one to be honest each time you open your mouth. Never having to remember who you bullshitted to allows a person to walk tall and sleep a solid eight hours every night.

Whilst Africa is both exciting and dnagerous (and I am not joking – just compare various statistics with those of the US and you will see what I mean) the MMM way of life even modified for Africa is for me the only way to go.

Russell that is a hell of an example you set for us younger guys! I actually just did a little case study on a buddy of mine who is in a similar situation, and even though I’m already pretty much on track, it is great to see where this path is likely to take me in 15-25 years.

This question isn’t really related financially but it’s something I’ve been thinking about a lot lately and does deal with both risk and fear. I have kids around your son’s age and have been lamenting that they are missing the freedoms I had (wandering the neighborhood without grown-ups). I still think they’re too young but even older kids don’t really get that anymore (due I believe to outsized fears of “bad guys”). Do you and Mrs. let your son outside alone? What are your plans for this in the future?

This is an excellent suggestion for a post, but maybe many readers are childless (makes sense for an ER audience). I grew up spending my day riding my bike all over town – even to play video games at the bowling alley (gasp!). It seems like this would be grounds for calling Child Protective Services these days… There’s always ‘rumors’ floating around about strangers driving around in vans (with curtains on the windows of course), and some foiled attempt to abduct a child. Unfortunately, that’s the part of risk that MMM didn’t address, it’s not just probability, but also the magnitude of the bad event (like one’s child getting abducted) which needs to go in to the calculation. For example, I would bike if I knew the worst outcome would be bruises and scratches (e.g. cycling on a college campus), but risking getting hit by a car and ‘seriously injured’ (being in heavy traffic, 45 mph roads to get to work or stores) changes the equation. Sorry, I’ll take my complainypants off now…

If you look at the actual crime statistics, the crime rate now is the same as it was in the 1960’s. Crime peaked around 1991 and it’s been on a downward trend since then.

I’d also ponder that fact that violent crimes are rare, and most victims of murder, rape and kidnapping actually know their attacker. Violent crimes towards strangers or kids randomly playing in the street are extremely rare.

You should study the actual crime statistics for your area and make some calculations. I like to compare the rate to driving in a car. I’m willing to bet that the chances of them dying in a car crash are greater than getting murdered or kidnapped randomly. If you are willing to put your kids in a car on a regular basis, it seems silly to draw the line at letting them play outside. You might also take a look at the incidence of obesity in today’s youth and the impacts that has on their health for an evaluation of the risks of keeping them indoors.

Did you hear about the lady who let her 10 y/o son ride the nyc subway alone? She got a lot of flak for it…. I heard an interview with her and I think she made the same point about death by car being far more likely for your kids than abduction. I believe car crashes are the leading cause of death for people under 35 in the US? Too bad our collective judgment is so clouded about cars and transportation.

Welcome to another community (or two) (rather like MMM, but less about finances and more about raising kids) that puts the statistics up, and the scare-tactics spouted by the newscasters in its place, and is generally trying to spread awareness.

The two sites are better at different things. The second is better at the statistics and how to use them in your favor, the first is more a collection of reports of media accusations that someone is a “bad” or “unsafe” parent for any number of reasons, followed by the author’s perspective on why it is overboard.

I think I’ve somehow always known to live like you’re suggesting, but I haven’t ever verbalized it quite so… mathematically.

It makes me laugh when I hear that people don’t want to go outside when it’s raining, because they’re afraid of being struck by lightning. Yet these same people buy lottery tickets, drive on a daily basis, and live very sedentary lives. When I try explaining the serious irony, they just brush me off because those things are “normal”, but lightning is “scary”…

Learning to get over the society instilled fear of low-probability events is one of the key elements to maximizing your badassity. I propose a mandatory “Practical Statistics” class which must be RETAKEN every 5 years to ensure a Totally Badass World.

According to the CDC, seat belts cut the rate of crash-related injury and death in half. So assuming that you always wear your seat belt, you should be allowed to double the survival odds in all of your calculations.

That’s the average fatality rate for all seatbelt wearers and non seatbelt wearers.
First, you’d have to figure out what percentage of people wear seatbelts.
If it turns out to be close to zero, then you would be correct that seatbelt wearers could cut the fatility probabilities in half.
But since many (most, I hope) people wear seatbelts, you’d have to do some math to figure out how much worse-than-average the non seatbelt wearers are and how much better-than-average the seatbelt wearers are.
It’s probably a two equations and two unknowns type thing

Yeah, you’re right that doubling would be too much. But it says that half the fatalities are people not wearing seatbelts, and a seatbelt would have kept about half of those people from dying. Doesn’t that mean that we could safely add 25% better odds to his calculations?

This is all assuming that his numbers are from recent years. Otherwise this makes no sense since seatbelt usage has gone from 11% in 1981 to close to 90% in 2009.

You simply divide the two – i.e. not wearing a seatbelt means you’re 5 times more likely to die in a crash than the general population (of whom some wear seatbelts, some don’t) – calculated from 0.5/0.1.

By wearing a seatbelt, your fatality risk is 0.5/0.9=55.6% of the risk to the general population.

Combining these, we get 5/0.556 = 9
(explanation: both the above risks are compared to the general population – we divide to get them compared to each other)

So you’re 9 times more likely to die if you don’t wear a seatbelt than someone who does, but to compare to statistics for the general population (which include both seatbelt wearers and non-seatbelt wearers) you need to multiply the risk by 5 to get the risk for a non-seatbelt wearer, or multiply by 0.556 to get the risk for a seatbelt wearer.

(Bottom line – seatbelt wearer fatality risk compared to general population is not quite half, but close (it’s actually 1/0.556 = 1.8 times less)).

I would be willing to bet that a large number of the deaths in any of these activities are caused by people being completely unsafe. Simply by being careful when driving or using power tools, etc, I would venture to guess that you would drastically improve your odds of survival beyond what the statistics would say. For example, it seems like half of the fatal motorcycle crashes I see are from hotshots driving at unsafe speeds and weaving in and out of traffic. Similarly, I’d guess that a large number of bicycle fatalities are probably caused by not wearing a helmet or not obeying traffic laws.

“I’ve got at best 60 driving years left in my life, so over a lifetime my chance of survival is (99.993^60), or 99.58%. In other words, driving causes an expected 0.42% reduction in my lifespan. 0.42% of 60 years is about 4 months.”

I agree based on your assumptions that the chance of survival is indeed 99.58%. However, the next sentence makes an assumption that I hope is wrong. Surviving in this scenario means living 60 years. Dying does not mean surviving 0. Therefore based on your assumptions, in the .42% chance over the 60 years you have of dying, (and ignoring age-specific death rates for the sake of simplicity) your expected reduction in lifespan will be even LOWER as the risk of dying still means you could have survived .1, 20, 59.9, etc. years. If you assume a uniform distribution of survival years in death (i.e. if you are dying, equal chance of surviving 0, 5, 10, …., 60 years) then you could expect to survive half of the 60 years in the event of death. So, I would say your expected reduction in lifespan to be only .21%.

Even when riding a bike, you take some common sense measures to make your rides even safer, i.e. wearing a helmet, carrying a cell phone, and using lights and reflective clothing at night.

For evening or night rides, it is good to find a LED white light and attach it to the handle bar and have a red blinking light on the back of the bike, this really helps cars see you better.

Also sometimes if the roads are busy with high speed cars, I will just drive on the sidewalks instead if there are not many people walking on them.

Also with power tools, again I have found that you can take some simple basic steps to make these much safer. For example, if you just got a table saw for the first time and have never used one before, read the manual first. Wear eye and ear protection while using it. Also, do not use power saws while under the influence of drugs or alcohol. This is not rocket science. These few steps will probably reduce the most common accidents with power tools by at least 50% or more.

Unfortunately, by riding on the side-walk you are doing another of those “feels safer despite the statistics” things.
Getting hit from behind by a passing car is the least common type of bike/car collision. The most common is at intersections and driveways, and the most common reason is because the driver did not see the biker, or did not expect them to be where they were.
Unless you get off and walk when crossing every street – and every driveway – you are actually increasing your risk of getting hit by a car by riding on the sidewalk.

I’ve been a long-time reader but generally don’t find the motivation to comment. This time is different.

I have to say I totally agree with everything MMM says here and take most of it to heart. My heart wishes I took the biking part more seriously than I do.

I think about everything in terms of my finances and never pay extra for a greater sense of security. I don’t feel unsafe in my small car because I’m an attentive driver that has never been in an accident. I think that the false sense of security of driving a massive SUV is dangerous if anything. Additionally, you can provide yourself that sense of security without paying a dime for it, let alone tens of thousands of dollars more up front and then many tens more in additional cost over the life of the vehicle.

I also have an individual health insurance policy. After you understand what you’re getting for the money, you can never go back to group plans with their per incident and lifetime maximums. I have insurance. I take care of the “health plan” on my own.

Likewise with investments, paradoxically, it seems like we’re only afraid to lose all of our money when we have none to lose. If you live well under your means, your money works for you instead of the other way around. You take a loss here and there, but as long as you’re coming out ahead of a savings account, you’re doing ok. I don’t tend buy cars and houses on impulse so why have stacks of cash sitting around?

Like a lot of posts, the bottom line here is the sense of individualism that leads some of us to question what we see other’s doing and decide to do it our own way.

Can you explain for us in more detail the distinction you make between individual health insurance policy and group plans using specific examples if possible? Since this cost is one of the ridiculously high costs in conventional life, it’d be great to hear your POV and experiences on it. MMM, have you done an article on health insurance? thx

It’s actually even better – you have a 0.42% chance of dying in the next 60 years, but on average this will only reduce your lifespan by 30 years. So the expected reduction in your lifespan is 0.42% of 30 years, about 1.5 months. 37% of this is only about 17 days.

Mr. MM, I’m intrigued by the last phrase: “Everything is gonna be All Right”. I feel the same way, except for one thing: global warming. What are your thoughts on it? I do think there are ways to solve it, and profitably (see my blog posts on the topic here: http://shindyapin.tumblr.com/tagged/SolvingGlobalWarming ), but I’m not sure it’s going to happen. I’d love to see a blog post on this topic.

Yeah, the planet is warming up. But how many global catastrophes were we all afraid of in the past? Silent Spring, Acid Rain, Global Cooling (for heaven’s sake) Overpopulation, and now Global warming.

I’m not saying it’s not an issue, but the planet has been both warmer and cooler than this before and it has survived. Also, we’ve always managed to find a way to fix our problems, somehow. This time will be no different.

Unfortunately there aren’t “easy” solutions like these for climate change, but it is frustrating that no real action has been taken in the US. If we want to talk about climate change, one point worth noting is that major reductions in personal carbon emissions fit perfectly into the mustachian way of life: drive fewer miles, drive a high efficiency car, bike everywhere you can, turn down the thermostat and put on a sweater, don’t buy a lot of useless crap, etc.

I agree with you that life will go on, but I think many people fail to understand the magnitude and rate of change that we can expect to experience in our lifetimes.

You’ve proved my point. We’ll solve it and the world will move on. I’m not saying it’s not an issue, really.

It’s pretty arrogant of us to assume that the current climate is the perfect one for the earth. Before we were here there was a 1 mile thick sheet of ice over the place we now call New York City.

. Seriously, I recommend that you read “The Rational Optimist” by Matt Ridley. Optimism is the most rational belief system throughout history, no matter how much we LOVE to listen to the pessimists declaring the end of the world. http://www.rationaloptimist.com/

The part I find annoying about the whole issue is the way the argument is being handled. Most of the pro-fossil-fuel people have tried to attack the credibility of the scientists, substituting their own pseudo-science (luckily the Rational Optimist does not do this). Just like the evolution “debate”, you’ll only make yourself look stupid if you go up against the Scientists in the Science Boxing Ring.

I know some real climate scientists, and they are pretty gentle and open-minded about the whole issue. But when non-scientific people catch on to the media hysteria, they start to worry about an imminent end to the world.

Instead, both sides need to handle the argument as dueling economists: what’s the total cost of rising temperatures (including the ecological one), versus the cost of fighting them?

But also add in the perspective of a Mustachian: most of the fossil fuel burning we do is for bullshit purposes anyway. Driving SUVs for “safety”. Commuting 15,000 miles a year “to save money on housing”. Burning 1000 kWh of coal-fired electricity per household per month because we don’t know how to hang-dry our clothes and set our A/C to 82 degrees F instead of 72.

If we slice the bullshit out of our fossil fuel consumption, we can eliminate climate change without even having to suffer. So let’s start with that.

(coming late to the party here)
In fact it’s true that agriculture is a huge contributor to global resource use, and if you consider that something like 80% of crops grown in the U.S. go to feeding cows, and think about the energy associated with growing, irrigating, fertilizing, shipping, processing, etc. those crops, not to mention housing, watering, slaughtering, processing and shipping the actual cows, and wonder what would happen if we used that land (or rather a small fraction of it) to grow food for humans instead, well, it’s a huge impact. Nevermind things like burning the Amazon rainforest to create pastureland. Fortunately, eating less meat (which is very expensive) and never eating at McDonald’s etc. (which is just dumb) also fit perfectly into the Mustachian way of life.

EldredAugust 19, 2014, 2:17 pm

“But also add in the perspective of a Mustachian: most of the fossil fuel burning we do is for bullshit purposes anyway.
Commuting 15,000 miles a year “to save money on housing”. .”

Are you referring to people needing to live farther away from work because the real estate is cheaper? That actually makes sense to me. In many cases, the houses further away from the city are much cheaper, as much as several hundred dollars per month. But I’m sure you have some calculation that shows that as an incorrect assumption. Could you explain that please? Thanks!

If you start with the assumption that car commuting is not even an option, other much better alternatives tend to magically materialize.

JamesqfJune 8, 2012, 12:37 pm

You also need to think about the secondary consequences of “solving” any problem, and how they affect your quality of life. For example, we’ve “solved” (temporarily!) the problem of overpopulation by employing unsustainable agrobusiness farming methods, and moving large numbers of people to urban areas that are basically the human equivalents of cattle feedlots. Doesn’t do much for the average quality of life, now does it?

PS: Covering NYC with a mile-thick sheet of ice could only be an improvement :-)

have you ever been to NYC? I know you were probably just kidding but I don’t bust on your hometown…cities are the best places to get around without cars so that is a big plus right there…bikes rule. Or they should. Pity the Chinese are buying so many cars…what a waste of their money and the planet.

As a matter of fact I have, and could tell a couple of funny (in retrospect, if not at the time) stories about my experiences.

I do see that you perhaps have a bit of a bias, or why would you assume that I have a homeTOWN? Grew up in the country, live in the country now (though most of a continent away). Have lived in cities from time to time, mostly as a matter of economic necessity. Indeed, if there is any one reason that I’ve sought financial independence, it’s so that I won’t have to live in one again.

It’s true that it may be easier to get around cities on a bike, but what’s the point of getting around? Even when I lived in smaller cities (Lausanne was my favorite for this) most of my biking was done to get out of the city.

Some people may like living in cities – tastes differ – but I’d bet that most don’t, especially if you look at the lower socioeconomic strata. The common pattern throughout history has been people moving to cities to make their fortunes. The few who did make fortunes left again, while most died in poverty. The real beauty of modern technology is that we can now have most of the economic benefits of urban life without having to live in a city.

While I personally would prefer living in the country, independent studies have pretty consistently shown more resource use per capita for equivalent standards of living by people living in rural areas than urban areas.

First, those studies are often fudged: they count what people use directly, but not the resources that keep the city-machine functioning. E.g. if you live in a city, you have streets, street maintenance, street lights, water piped in from maybe hundreds of miles away.

Then there’s the equivalent standard of living thing: look at the resources used in providing your average urbanite with say his/her cup of coffee at Starbucks: building, power & utilities, staff, etc. Whereas if you live in the country, there is no equivalent. You just make your own coffee.

Thing is, there are streets and running water in the country too. But in the city, hundreds of people use the same street, where a country road might be used by half a dozen. One pipeline will supply an entire city, but in the country every single house has its own well and septic system.
One starbucks covers hundreds of people too… but if you are a mustachian living in the city, you make your own (or don’t drink it at all!)

GayleRNJune 8, 2012, 1:06 pm

Sometimes I look out my window at the nearby Great Lake and muse about global warming. That lake at one time supported the growth of now fossilized coral. Then I imagine the conversation at the local hunter’s club. “Hey guys I am having a heck of a time finding any woolly mammoths and mastodons lately. All the ice seems to be melting and I am really worried about my house being flooded. Maybe we shouldn’t build fires any more and the ice will stabilize and the animals will return and then we can have another fun BBQ like we did last year.”

A little fanciful but my point is that we think that what we see is what normal is supposed to look like. Those Ice Age hunters were incapable of seeing the huge and beautiful supply of fresh water in the middle of North America frozen under their feet. While I believe that conserving resources of any kind is only common sense I also wonder what much bigger picture there is forming that none of us will live long enough to see come to fruition.

Oh and for those who will dispute the scenario, this is my fantasy and there are quite possibly no facts of historical or scientific accuracy or truth of any kind used in its construction. I am however considering the addition of dragons and dinosaurs. And polar bears and ice fairies.

You aren’t as totally far off as you may think:
Even the scientists are assuming that what we happen to see is “normal”.
We don’t have the data or the computer power to model the actual natural climatic changes, so they just pretend that conditions now would be exactly like they were then if not for human activity.
Climate models currently use 1900 as their starting point, as though the climate was actually static before that date. Except we know for a fact that this isn’t true.

The point here isn’t what’s normal, it’s the rate of change. The world could adapt to a warmer climate (at least anything less than a runaway Venus-effect change) if it had a few million years to do so. Make the same change in a century or so, and it’s not going to be pleasant to live through.

We don’t really need to speculate, since we have fossil records of a somewhat similar event, the Permian-Triassic extinction.

MMM – were/are you a poker player? All this talk about EV and how your brain automatically does these calculations sounds like someone who has been classically trained in the art of card playing.

Along these lines, I suggest adding DUCY? by David Sklansky to your list of books to read. A lot of the examples in the book are gambling/poker specific, but the broader theme of the book is how to train yourself to think differently than everybody else. It is similar in some ways to the excellent book, Nudge, which I’ve noticed is already on your future reading list.

That’s way too much calculation on the small car. :)
I just go with my gut and do what I want.
People will do what ever they want and then rationalize it. Isn’t that right?
I love small cars too, but we are driving a Mazda 5 now because it’s more convenient for baby and grandparents.
I’d rather invest all my saving in the stock market too, but Mrs. RB40 wants to have more cash around.

But what people “want” is strongly influenced by the information floating around – even if its totally wrong. Everyone “knows” that big cars, trucks, and SUVs are safer than midsized cars – only this turns out to be 100% false.

You may not be consciously aware of it, but every so-called “gut” decision is still made on the basis of information you got somewhere.

What is your take on cash reserves? I really would like to bring my “emergency-fund” down (steady income, stable career) but have had trouble pulling the trigger due to the safety margin a stash of cash provides. After reading MMM and fellow readers, I think I’ll drop the cash reserve amount. Since we should have SOME cash on hand, what do you think is the right number? 1, 2, 6 months expenses? I’m leaning toward just keeping $8-10k on hand as that would cover most emergencies in a pinch and actively investing the rest in high yield dividend stocks and index funds.

You can either withdraw investments to pay it (which shouldn’t usually take more than 30 days to withdraw, thereby paying no interest) or, if the market is especially down and you’ll lose capital by withdrawing, pay it off over the next couple months from your paycheck, paying relatively little interest.

You are covered in an emergency, but since emergencies usually don’t happen, the interest you make on the 10k you don’t have in cash will generally more than make up for any you end up paying in early withdrawal fees or whatever

My wife’s niece and nephew never spent the night with their grandparents. Only allowed to play in the front yard, and of course, never talked to strangers.

The kids on my block are driven to school by each’s own parents. The school is < 1 mile and the bus stops 200' from the house.

I too have not watched the news in years, but its #1 selling point is fear. Here in Los Angeles when we get our first rain, the local news will devote the show to "Storm Watch", some weatherman will be standing in a creek showing how bad the rains are, and oh yeah, he warns "Don't do this at home".

Great to see another Angelino here! I have to ask, do you bike a lot? What’s been your experience on it? I want to start, but haven’t yet, due to a little bit of LA “fear” (mostly of getting my bike stolen!).

I used to have that fear too : Montreal, PQ is one of the world’s capital for bike theft. I solved this by buying the best padlock on the market. Don’t bother with crappy inexpensive ones. Some of them even have a guarantee that you will not get your bike stolen, and will reimburse your a lump sum if you do.

Worth checking out. Expect to pay 100$ though. But it’s worth it. Talk to a local bike shop, they are nice.

Susan, I live in Orange County. If you Google Earth (wow, a new verb) Whittier Blvd, I start on Whittier at the beginning in OC and take it to Santa Monica. It’s around 65 miles one way. Not mustacian, but I have my wife pick me up in her huge gas guzzling SUV.

I have a total blast, especially I enjoy the food trucks in East LA and the Mexican mom and pop restaurants. Being a vegan, I can eat better/more cheaply there than any so called vegan-healthy restaurant.

Oh, Shit, Mike! As a former Angelino cyclist, I was drafting you on this post and enjoying the ride. Until the last sentence. To quote the great John McEnroe, “You cannot be SERIOUS!”
I’ve enjoyed your comments here and at the forums. I sincerely hope you will re-consider your position on this issue. What the statistics do not include is the number of people who are SAVED from reportable injury by the fact that they were wearing helmets. Been there, done that, replaced the cracked helmet and lived to ride another day. Not wearing a helmet could be considered the equivalent of not wearing a seatbelt. Please, tell us you were just kidding!

I don’t know…
Personally, I usually wear a helmet.
But from the statistics I’ve seen, there is no evidence they actually help overall.
The theory is that both riders and drivers risk compensate when they are worn, and the accident rate increases.

I know lots of anecdotes along the lines of “if I hadn’t been wearing it…” but you don’t really know that you wouldn’t have survived anyway.

This is the article that claims that a helmet is insignificant towards increasing bicycle riders’ safety.

Their experiment tested how closely a car was to the cyclist was as they passed the cyclist under two conditions: when the cyclist was wearing a helmet and when the cyclist was not wearing a helmet. They concluded that bicycle safety increased for those not wearing a helmet simply because cars are more likely to pass a cyclist using a wider berth.

To me, their data is inconclusive. The data is suggestive simply based upon the assumption that a wider passing car is less likely to hit the cyclist, and not considering any other variables (amount of daylight, traffic laws, the quality of driving of passing cars, the speed of the cyclist, road conditions……….).

I’ve been biking daily from Highland Park to Downtown for work, it’s a lot better out there than you’d think. Drivers tend to give me a fair bit of room. I’d definitely read through http://bicyclesafe.com/ before you take a ride, I know I also posted another resource that has some good tips in the forums.

I couldn’t bike in Los Angeles. I lived in Redondo Beach and worked in Santa Clarita (worked on the “Deadwood” TV show) and that was 50 miles each way. I had to be there at 5am and rarely got home before 10pm.

When I moved to Orange County (city of ORange, by Glassel/Lincoln) I rode the motorcycle everywhere. 50 mpg is better than most cars. heh

Well the kids in my neighbourhood (Wellington New Zealand) use their scooters down our massive hill every morning on the way to school.

Every so often NZ media runs stories about how coddled kids are now but honestly everything I see of kids shows perfectly normal rabunctioous kids who go mountain-biking on the forest trails and hang out in groups in town.

Sometimes even coddling becomes a *fear* story in the media (you’re always doing something wrong if you’re a parent).

MMM – Can you give some details or point to a previous post where we can find out your car insurance strategy? For example, we have two cars – one from 2003 and another from 2004. Both are worth about $8,000 each now but would be pretty expensive to fix if an accident happened – they are German sedans (BMW 3 series and MB C-class). Both cars were bought cash, no liens. (Edit: Before anyone jumps and starts ripping on ‘premium’ brand of cars – both cars were bought under private party book value and I know both very well mechanically which allows me to do most of the maintenance work myself. I also have most of the special tools, books and software that is needed to do some of the work).

We are currently carrying comprehensive and collision on both vehicles at a cost of around $330 extra per year with a $500 deductible. I am considering dropping both and carrying $500K combined liability only. We put about 12K miles per year on one car and 7K on the other, as I commute on a motorcycle weather permitting. I would love to hear MMM’s or reader comments!

Can you afford to replace a car? Then drop comp/collision. I’m going to drop it on our (only) car once it hits 2 years of age.
Also see about raising your deductibles to 1000 if possible, on liability too.

Yes, I can afford to replace the car if it is totaled or stolen. Not ready to go to a 1 car household as it is pretty nice to be able to come to work dry and safe(r) when it is raining or snowing plus we got a baby on the way. My motorcycle with its antique plates has been a gold mine for commuting as it is exempt from most of the regular BS (personal taxes, inspections, yearly fees etc). Its operating costs have been averaging about $15 a month including insurance and maintenance. Once the house is paid off in a few years, I will seriously consider becoming a 1 car household if we can figure out a way for my wife to become a stay at home parent or if my commuting situation improves.

Yes, pretty much :) If we want to get rid of our mortgage, I need to keep on working in my IT field bringing in 3 times as much as my wife makes. After the house is paid off and if we have another kid, it would make sense for my wife to stay home (which she would like) and for me to continue financing our path to FI, at which point I would like to get into something other than IT.

Yeah, the safety first nonsense is just another aspect of the learned helplessness that marketers use to get us to buy useless shit. Astronomically small odds of dying in a crash per vehicle mile driven? BUY A BIGGER CAR TO MAKE ASTRONOMY TWICE AS BIG FOR THREE TIMES THE CASH! Don’t think about it and drive half as much…

The real danger is that people become conditioned to think that one can always buy stuff to reduce risk even when it’s completely uneconomical or impossible, such as the two risks you mentioned.

P.S. We just had a baby and we are getting junk mail for baby life insurance. WTF???

Firearms! You forgot firearms. Everyone would be so much safer if they were armed to the teeth.
Home invasions, burglaries, murders – all can be avoided by constantly carrying a loaded gun. Or so they say…

Actually, higher legal gun ownership rates are correlated with lower crime rates. Since getting rid of guns would be impossible, it’s better to have law abiding people armed so they can defend themselves against armed violent criminals.

The statistics on this are actually all over the map. Pro-gun and anti-gun groups cherry pick and interpret the stats in a way that best serves their agendas. It stands to reason though that violent criminals would be more inclined to target people who are unarmed. If you were a burglar, you’d probably feel more confident breaking into the house of unarmed people rather than the house of armed people. Armed security guards at banks are a deterrent of robbery:http://www.hgexperts.com/article.asp?id=7655

Better yet, let’s look at the expected loss of life we experience from the gun ownership frenzy in this country.

Oh, it’s negligible amount? Good! So let’s stop the ridiculous multi-decade argument we’ve been having over it (as politicians consistently bring it up to drive a wedge between rednecks and city slickers).

Again, if we really care about living longer and safer lives, let’s get some more bike lanes around here and STFU regarding guns and other social/culture issues.

Sure, it’s worth discussing gun policy occasionally, but not in every single national election (and Definitely not on Mr. Money Mustache), since statistics tell us it’s a tiny problem these days. As Ramit would say, “Focus on the Big Wins!”

Hear, hear, brother, on the bike lanes. There is a four-lane highway that I take to work every day. Two lanes in each direction, plus a continuous break-down lane. There is only about 18 inches of road between the sidewalk curb and the outermost white solid line on either side of the road – very dangerous for biking. But my,oh my, those vehicle lanes are sure wide and spacious! And why are they so wide? To accommodate all the damned rednecks in southern Utah in their jacked-up trucks (no offense intended towards Mustachian rednecks). If they would just sacrifice 12 measley inches from each of the five lanes and add that amount to bike lanes, it would at least be a start.

“Optimism is also why I sought out that guest article from Jim Collins – he’s one of the few other people out there correctly reminding us that Everything is gonna be All Right.”

and if something does rear up and bite you in the ass it is unlikely to be the thing (s) obsessed about.

Thanks for the plug, Mr.MM.

I grew up watching my mother ruin any chance for happiness in her life thru fear. Like many people, she had some real issues. The collapse of her husband’s health and business for one. But she didn’t wind up on the street and, in fact, always lived a comfortable life. (OK, I helped. That happens in families.)

None of her attention to her fear ever helped.
The thing that finally killed her at the age of 76 was the one thing she never worried about: her cigarettes. Ironically, a big part of why she smoked was likely the soothing nature of the habit provided some relief from all her worries.

We live in a very quiet and stunningly safe neighborhood. The other day I was walking the dog just about the time the school buses were dropping off the kids. Beautiful day.

At each corner moms were parked, windows up/engines running, in their premium SUVs (nobody around here would be caught dead in a low rent and dainty little Tahoe) waiting to pick up their precious little ones for the 1/2 block drive home.

These, of course, are the environmentally responsible few that actually let their kids ride the bus. ;)

My grandmother was the same way — I suspect it was an undiagnosed anxiety disorder (she was from the generation that didn’t believe mental illness existed), and I think she would have been a much happier person (and by extension, the people around her could have been happier) if she had dealt with that.

I had a “safety epiphany” when I was riding in a car in Delhi, India. I looked to my left and a man was riding a small motorbike. On the back, a woman was sitting sidesaddle with a baby on her lap. In 8 lanes of traffic in a city of 20 Million people. In the US that same family would have the Humongo minivan and car seat to protect their little one.

In Hanoi, Vietnam, I saw an entire family of 5 on a very similar motorbike, the kids standing on the platform between the driver and the handlebars – also in 8 lanes of traffic.

Why? While I don’t recommend navigating traffic like this on a motorbike, I do think that we don’t have any real danger in our lives here in the US. And humans are built to handle danger. We’ve got entire bodily systems that prep our bodies for fight or flight at a moment’s notice.

So, since we don’t have any real danger, we have to manufacture it. Thus biking is too dangerous, you need a giant car and huge car seat to be safe, we practically get strip searched at the airport, etc.

People around the world have real dangers and difficulties in life. We have it too dammned easy and shouldn’t ever forget it.

Love this comment- so true! As a bike commuter it blows my mind that safety concerns should outweigh the benefits of joy, health, and fun- not to mention getting to move even when traffic is slowed to a stop. It’s really just not that dangerous here in most places, unless you bike incredibly fast in a city without a helmet, and/or without lights, which some do. When I was in Vietnam there were babies standing on incredibly steep hillsides of corn fields right off the rural 1-lane highways. I would see them wander and fall and take care of themselves while their family members trusted they’d be OK and wouldn’t jump in the way of a vehicle. No helicopter parenting there and the kiddos seemed strong and happy:)

Just a couple days ago, a friend made an offhanded comment about how much TV advertising there is for insurance. Somehow until this post I did not note the now-obvious symbiotic relationship between the Fear-Mongering “news” programming and the Fear-Assuaging insurance that a myriad of companies are willing to sell you to wipe out that fear you just infected yourself with.

Great work on the tiny effect of vehicle-type in relation to fatalities. Even with fairly responsible news sources, I’m surprised how rarely they report the base-level risk of a malady when highlighting something that increases that risk. “Omigod, did you hear that eating Eastern Variegated Rutabagas DOUBLES your risk of dying from Grishnev’s Fingernail Sarcoma? You have to be crazy to eat an Eastern Variegated Rutabaga!” “Oh, what’s that? My risk of dying from Grishnev’s Fingernail Sarcoma is approximately 0? And two times 0 is still 0? Ok, maybe that’s not so bad then.”

The reporting of correlations between x and y is driving me nuts, especially when it comes to consuming food. Correlation does not equal causation, yet you get one article about the potential detrimental effects of a substance and all of a sudden people are screaming at me “DON’T YOU KNOW IT CAUSES TEH CANCER!!!1!!111”

Until there is a magic formula for everything, correlation serves as a proxy for HINTING at a problem. Sure, you’ll have some correlations that pan out to nothing but hindsight is 20/20. I still think you’re better off listening (not necessarily adhering to or becoming alarmed immediately) to correlations rather than just dismissing all.

Yes, many times the correlation does lead to causation. I think it is safe to say there are a lot of correlations regarding health and diet that have been stated that will undoubtedly lead to new discoveries with causative sources. I just hate pseudoscience studies that people in turn overreact to and are then trumpeted through the media.

it isn’t that some correlations “pan out to nothing” as in “are just coincidence”, its that many (most?) correlations are both caused by a common 3rd cause.

For example: people who drink coffee have a higher fatalities rate than people who don’t. But it turns out that people who drink coffee also are more likely to smoke. The cigarettes are what is killing the coffee drinkers, not the coffee.
Once you control for smoking, the coffee drinkers actually have a (slight) longevity bonus. If you just looked at the correlation, you would get a very wrong conclusion.

Love this article. Made me go look at my work-provided insurance and hit myself on the head for not taking a deal they offered a couple years back, where I got some cash into an HSA in return for adopting a higher deductible plan. I feel incredibly dumb!

I wish I could agree with you more. I can’t. Awesome post! I really don’t understand why fear sells so well (in the media, in politics, and everywhere).

You’ll find this sort of fear mongering statistics in medicine a lot too…. Something like “Statins decrease your chance of coronary death by 50%!!!” And when you read the fine print it will be something like “if you are a male with previous heart disease and are over 55, your chance or coronary death in the next 5 years goes from 2 in 1000 to 1 in 1000”. Whoopie…

(I’m just picking on Statins… the same will happen for a zillion other things… and I’m pulling these numbers out of my ass because I am too lazy to google, but it’s something in this ballpark.)

@skyrefuge — insurance is a very profitable place to be these days, precisely because there are relatively fewer accidents and deaths and a lower level of criminal activity than there used to be. Despite the hysteria to the contrary, the everyday world is actually much safer that it was a generation or two ago.

Here’s another one for you: Meat eaters tend to think that a vegetarian or vegan diet is risky. They often ask, “Aren’t you concerned you’re not getting enough protein?”

So I often ask… How much protein do I need? How do vegetarian primates and elephants get enough protein? Most of the time people have no clue as to how much protein they need or how much they themselves are consuming. Nor do they realize that eating too much protein, especially from animal sources is linked to all sorts of diseases. Only 2.5%-10% of your calories need to come from protein.

Yes, I’m suggesting exactly that. Of course in the case of elephants, the vegetarian evolution goes back upwards of 60 million years (see e.g. Phosphatherium and Moeritherium), which is why they’re good at it :-)

Primates evolved principally as omnivores. If you doubt it, look in the mirror. Notice the eyes close-set for binocular vision, and the canine teeth? Both adaptions for hunting. You can learn quite a lot from teeth: compare the teeth of an obligate carnivore like your cat, a more omnivorous species like a dog, you, and a pure vegetarian such as a horse.

Ah, but omnivores (racoons, pigs, most primates) rarely if ever eat mammal meat. Even bears do it only when desperate. In addition to plant foods, they often eat fish and eggs, but more than anything else bugs.
So maybe you can use evolution to justify eating bugs, but you can’t really use it to justify steak, or even chicken.
That is a purely human invention, not an evolutionary one, which was made possible by advanced technology (like spears) which didn’t exist for most of primate evolution.

I remember reading a coprolite study from the American Southwest. Humans back then ate anything they could lay their hands on – this would include both vegetable and animal matter. Roasted agave and yucca, flowers from yucca and agave, prickly pear, seedpods from goosefoot and prairie dropseed grasses, smaller mammals like foxes and skunks, rodents, lizards, fish, and yes, grasshoppers too. This leads me to think humans are more opportunists than anything else when it came to diet, and that too much of any one thing (whether animal products, plant products, or high fructose corn syrup) isn’t good for the diet.

My only beef (pun intended) with the vegetarian diet is that I am hungry all. the. time.

Depends on the species, and on the difficulty of catching said mammals. Bears, for instance: black bears eat mostly vegetation, meat when they can get it. Grizzly bears are about 50/50 vegetable/meat, while polar bears are almost entirely carnivorous. Likewise with wolf/coyote/dog: they eat meat when they can get it, vegetables and fruit likewise. (My own two love strawberries and raw bell peppers.) Chimpanzees do the same: meat when they can get it (they actively hunt some kinds of monkeys), fruit & vegetables otherwise.

I think people who say “don’t eat sugar” actually mean “don’t eat food that contains added sugars, or excessive amounts of sugar.” It’s a common lazy shorthand on the Internet these days — sugar is the devil du jour, just like fat was in the 80’s and 90’s.

The reason fruit is ok is it also contains loads of fiber, which makes the digestion of the sugar take longer. Foods these days are manufactured to digest fast so you’ll be hungry soon for more of their product. This overloads the liver with sugar and causes fat storage, along with many other problems.
Just watch Sugar: The Bitter Truth on youtube, and you’ll realize what’s wrong with sugar (i.e. sucrose and high fructose corn syrup) – everything!

Piling on here, but this is a really silly rhetorical question. Different animals have different digestive systems. Humans aren’t elephants — I don’t know much about how elephants work, but I’ve heard people (!) use this same argument with *cows*, and the answer there is “they are ruminants, and have specially designed digestive systems that allow them to derive nutrition from grass. Humans cannot derive nutrition from grass.”

I suggest a different line of attack in your responses to this question; make it fact-based. Then you won’t lose the biologists. ;-)

“How do you get enough protein?” “Protein is found in lots of foods, not just meat.” There! Factual answer instead of misleading rhetorical question. Boom, done.

One of the typical comments I hear from my friends and family about living a frugal lifestyle so I can become financially independent is “Well, you could die tomorrow so why are you pinching pennies?” or “You only live once! Live it up!”.

True, I could in fact die tomorrow but the likelihood of that being from natural causes is minimal because of the fact I eat well, I exercise, and I take care of myself mentally; so the odds are stacked against me dying tomorrow.

Granted, there are always freak accidents but I am comfortable those odds. What I am operating under is the assumption I will live an average lifespan and I am very happy with my decision to be financially disciplined, to exhibit thriftiness, and to generally save and invest my dollars today for a really great payoff in the future!

Interestingly, I am a big bicyclist and I do not wear a helmet. Is this riskier, yes. However, I am always surprised at how different countries utilize helmets. In Amsterdam, one of the most bicycle heavy countries i have been to, I did not see a single helmet. Side note: drivers are more bicycle conscious there because of the bicycle culture, but still.

And in Africa or India i would see a mom or dad driving a motorcycle with a baby swaddled to their back and 2 other kids sitting behind them, none wearing a helmet, while weaving in and out of chaotic traffic and livestock!

The states operate in a fear driven culture where someday I’m sure we will all be bumbling around in bubble wrap!

Just one addendum…look for inefficiencies in the market. I was a car insurance pricing actuary for the greater part of a decade, and learned that especially for the large national carriers, there are lots of potential inefficiencies in the market…and one of the big ones is collision and comprehensive coverage on older cars.

It is hard to develop ratings for all cars individually because there are so many different models and options…so they are typically bucketed into two groups that lets the insurer estimate the cost of repairs or replacement…first is “cost new”, and second is “model year”. Cost new is intuitive, since totaling a $15k car would take less to replace than a $75k car. They use model year for two reasons: as cars age, they depreciate, and new cars have fancier options that cost money to replace/repair. For example, replacing an airbag that goes off costs around $1000…so cars built in the 80’s without airbags wouldn’t have that repair cost built in.

There is an independent agency that develops the factors for these classes, ISO, that a lot of insurance companies buy. One odd thing about these is that they typically use a 5% differential from year to year. So buying a car that is 2 years older would save 1/1.05^2 = 9.9% just because of the model year. A 20-year old car today (a ’92), would save 62% off of the rate of a new car.

Now, the kicker is, since these are factors, their average overall rate is determined by the average factor of all of the vehicles insured. The average age of a vehicle insured is something like 4 years and the number of cars in each older year plummets. And the second kicker is that the 5% differential is generally too much. So because of averages, I end up paying something like 50% of what I should while new car owners pay something like 100.3% of what they should.

So I currently have a 1993 Buick LeSabre that’s in decent shape. Collision and Comprehensive for a year with a $50 deductible (gotta have a low deductible when the payoff is small) costs about $45/year. Given that the car is worth about $1500 and I don’t expect it to depreciate much more in the future (a working hooptie is worth that…), it would take about 32 years of payments without a claim to break even (1500 – 50 deductible/45.) I know this is small change, so it might not be worth the hassle, but it can get some other perks…like having full coverage on your car automatically extends to any car you borrow, including a rental or the “$15 for 75 minute” hauler at Home Depot…

This analysis is based on expected value (“how many months of lifespan will I gain on average”). But the correct metric to use is expected utility, not expected value (“how much do I value reducing this risk”). Most people are risk-averse and will trade some amount of expected value in exchange for less risk. This is well-established economic theory. For a lot of people, $64000 is worth reducing the risk of catastrophic death, especially if you love your job and/or are very rich.

That’s a good point – economists measure utility, statisticians measure expected value. But I suspect most of the drivers who buy SUVs for safety are measuring only fear and susceptibility to marketing.

If I asked them the expected number of months of life they expected to gain, or even the chance of dying in a car vs. a truck, I suspect they would not have even sat down to do the calculations. And thus, they cannot possibly have a good rational estimate of their utility.

An irrational one? Sure.. but that’s the whole point of this blog – shoot down all of your old irrational estimates of utility! It just doesn’t roll off the tongue very well, which is why I use “Financial Freedom Through Badassity” instead.

I get the same comments from friends and family about pinching pennies! I’ve told them that it actually feels better to live a frugal life, that their way is not more fun, but they don’t believe me. Oh well. All I can do is point them toward this site and hope they learn!

Mr. MM,

Great Post yet again! I particularly liked the quote:

“Statistically, there only two risks in modern life that are significant enough to get me a little scared:

the risk of wasting my life by not living it to its fullest
the risk of ruining my own health at an early age, possibly limiting my ability to accomplish #1”

Right. Since Hurricane Andrew blew through S. FL in August 1992, the media down here has drummed up and defined “Hurricane Season” as June 1 – Nov. 30. There was no such thing before. Now it’s six months of solid fear-mongering, plus two months of prep news leading up to June 1st, plus two months of re-cap after Nov. 30. So, almost year-round hype about hurricanes in FL. During “Hurricane Season,” the media try to cheerlead a normal rain storm into a category 5 hurricane and get depressed when that doesn’t happen.

My homeowners insurance dropped from $1600 to $700 per year when I cancelled hurricane coverage.

I think another negative side-effect of “too much safety” is that it tends to degrade common sense. If your life is supremely “safe”, then it is probably supremely sheltered. I believe insufficient exposure to the “real world” retards your ability to make rational decisions about simple matters. (I suppose the big pro-consumerist marketing machine wants to keep us stupid, but that’s another topic.)

For example, I always chuckle at those silica gel packets that come in random things (like shoes) to ward off moisture. They always sport a big “DO NOT EAT” label. Is that necessary? Who finds a random packet of something in their new shoes and says, “Hmm, what is this? Maybe I should eat it!”

Or the classic case of “Warning: contents may be extremely hot” on our coffee cups. I’ve read that the famous McDonald’s lawsuit was a bit more nuanced than that, but still, at the end of the day—isn’t the fact that coffee==hot common sense?

Next we’ll have to sign choking-hazard liability release forms at the grocery store.

The point is, if you live your life in such a way as to avoid risk, I think that’s a risk in and of itself. You risk losing your edge, giving up alertness and awareness, and actually making yourself more vulnerable to unforeseen events.

The McDonalds lawsuit was actually a LOT more nuanced than ‘hot coffee=bad’. the large payout was punitive damages awarded by the court. The suit was only filed for the tens of thousands of dollars worth in skin and muscle grafts and the like that were needed to treat the extensive burn damage and disfigurement caused by that one small cup of hot coffee. Which should tell you that that coffee was not merely “hot” in the “gee, I might have to blow on it a little” sense.. It is common sense that spilling hot coffee on you might scald and hurt. It is not common sense that spilling coffee on yourself will cause third degree burns, muscle and nerve damage, and render fat inside your body. Hence the lawsuit – because the consequences of that bit of stupid were vastly above and beyond anything that might be considered a ‘common sense’ set of consequences.

You don’t go far enough on the small car vs SUV safety question. You need to consider not only the risk of you (or your passengers) being killed in a particular size car, but the risk of people in other cars, cyclists, and pedestrians being killed by your car.

I’d suggest looking at the paper “The Effects of Vehicle Model and Driver Behavior on Risk” by Wenzel & Ross of Lawrence Berkeley Nat’l Labs, which shows that larger SUVs and pickups are considerably more dangerous than small to midsize cars.

Thanks for making this comment. I was looking through the comments to see if someone would talk about this. The other side of the car crash by type statistics the MMM used is the fatality rate that is caused by a type of vehicle. So if I were an Anti-Mustachian who chose to drive a Tahoe and I was unfortunate enough to be involved in a collision with a compact car, I am much more likely to CAUSE a fatality to the occupants of the smaller car even if my risk of dying is slightly reduced.

This makes the decision to drive a SUV/Monster truck/wheeled tank for no REAL reason unacceptable.

I think that, generally speaking, driving an automobile is pretty easy. You can typically get away with short periods of unattended driving (witness all the people texting while driving).

But what if driving were really hard? As in, if you stopped paying attention for even the briefest moment, your chances of disaster would go up dramatically. That would certainly reduce the incidence of texting while driving (I hope!). But would it make conditions overall safer? I dunno… I suspect that within the specific category of driving, the rate of collisions would go up. But the broader impact might be better—perhaps fewer people would choose to drive and overall driving-related bad stuff would decrease. Not to mention the secondary benefits such as reduced emissions and (presumably) increased biking/walking.

When I used to drive a lot, when I was on the highway, I was a notorious speeder (20+ over the limit). But I was extremely attentive to what I was doing (primarily in the interest of looking for cops). Still, I managed to get a ticket, resulting in me driving the speed limit for a while. I found that I was considerably less attentive while driving the speed limit, the point where I felt bored and borderline sleepy. I know this whole anecdote is “Wall of Shame” worthy, but this was long before I put a lot of rational, MMM-style thought into my driving habits. At the risk of sounding elitist, I think the overwhelming majority of people (meaning the non-MMM audience) would relate to this story.

The point is to add to my earlier comment, that many activities are perhaps *more* risky because we’ve tried so hard to make them “safer”.

I mean, what if we raised the bar for driving? (Ignore for a second the mass outcry.) I distinctly remember the driving test I took when I was 16 years old, and it was a joke. What if driving was an activity that required a more rigorous license, such as a CDL? Wouldn’t that result in fewer drivers overall, and a better average quality of driver?

Your talking about risk compensation.
Your theory clearly holds: take, for example the gal lower accident rate of aircraft, despite (or rather because of) being more challenging to operate and more inherently dangerous.

My solution would be to mandate that all driver’s airbags be replaced with a giant steel spike sticking conspicuously out of the steering wheel, aimed directly at the drivers chest. Eliminate the illusion of safety, and you eliminate risky behavior.
I too used to speed excessively, and it took a major wreck to cure me. Luckily no one got hurt (both vehicles were totaled). If we had real training, perhaps each individual wouldn’t have to learn this lesson the hard way!
(Not to mention eliminating all the people who clearly don’t have a clue where the edge of their vehicle is! If you can’t pass a cone test in your full-size SUV, your drivers license should limit you to small cars only!)

I have to disagree about aircraft being more challenging to operate. My experience (with small planes) is that most of the time they are in fact much easier to operate than cars. In clear weather, the only part that’s at all difficult is landing. The chance of being hit by another airplane is miniscule, while other vehicles are an ever-present danger on the roads. Likewise pedestrians, deer, and so on can only run out in front of you on takeoff & landing, and then only rarely – I’ve had it happen exactly once in over 30 years of flying.

MMM – “I’ve been riding dirt bikes and motorcycles for 22 years now.. long enough to receive dozens of lessons about how dangerous those Death Machines are.” You still ride? I thought I read you sold your motorcycle :(

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